"We are pleased to announce that we have acquired Farecast, a Seattle-based smart travel search engine, and we welcome them to the Microsoft family. Farecast has been a partner of ours on MSN Travel and we look forward to working closely with the Farecast team to incorporate and apply its technology in new and interesting ways."

The deal closed April 9 and all 27 Farecast employees will become Microsoft employees as part of the acquisition, Burk said.

Farecast was founded in late 2003 by Oren Etzioni, a computer science professor at University of Washington. The online service, launched in 2006, uses data mining technology to predict whether the price of specific air travel itineraries will rise or fall, and whether a currently listed hotel room rate is a good deal.

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They are not talking much because this entire deal is about Search and competing with Google, and it can't be framed for the marketplace until the Yahoo! bid resolves. Microsoft is further signaling that it can go it alone to compete with Google and has a clear strategy to do so in search through more aggressive verticalization. We posted about this on our blog here:http://www.uptake.com/blog/travel_industry/farecast-is-microsoft-getting-into-travelor-into-contextual-targeting_253.html
Microsoft already has a lot of experience in blended search so integration with Farecast should be easy. What other verticals are next? And could this be integrated into Y! travel should the acquisition go through?